Original Articles
Monetary Sovereignty: Nature, Implementation, and Implications
Eric Tymoigne,
Corresponding Author
Eric Tymoigne
He can be reached at etymoigne@lclark.edu
Search for more papers by this authorEric Tymoigne,
Corresponding Author
Eric Tymoigne
He can be reached at etymoigne@lclark.edu
Search for more papers by this authorDepartment of Economics, Lewis and Clark College, 0615 SW Palatine Hill Rd., Portland, OR, 97219. He can be reached at etymoigne@lclark.edu.
Abstract
Monetary sovereignty is a central concept of Modern Money Theory (MMT). The paper explores the characteristics of monetary sovereignty, the means used to implement it, and some of its theoretical and policy implications. Herein, it is shown that monetary sovereignty involves a high degree of coordination between the central bank and the national treasury. The paper also argues that monetary sovereignty is not special to the United States, does not require direct monetary financing of the treasury, does not tell us anything about the optimal size of the fiscal balance, and is not dependent on the willingness of foreigners to hold the domestic currency.
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